Corporate reputation as important as product brands, survey suggests

23-Jan-2012 - Last updated on 23-Jan-2012 at 11:47 GMT

More than two-thirds of consumers avoid buying products if they dislike the parent company, according to the results of a new survey from Weber Shandwick and KRC Research.

The research involved 1,375 consumers and 575 senior executives from companies with annual revenues of at least $500m in two developed markets – the United States and the United Kingdom – and two emerging markets – China and Brazil.

Seventy percent of respondents said they avoided buying a product if they dislike the company behind it, and 67% said they were increasingly checking product labels for the parent company. In addition, more than half (56%) said they would be hesitant to buy a product if they could not find the name of the parent company.

"Consumers are using their dollars as a vote of confidence in companies they trust," said Weber Shandwick's chief reputation strategist Leslie Gaines-Ross. "As our research confirms, corporate and brand reputations are now nearly indivisible. The company standing behind the brand assures consumers that they can trust the quality, ethics and safety of the brands they are buying."

The research found that while reputation is important to consumers, perceived wrong-doing tends to overshadow companies’ efforts to do right. Among the top things respondents said they talked about when discussing brands, 43% said they were likely to discuss corporate scandals and wrong-doing, compared to 37% who cited corporate good deeds. Thirty-one percent said environmental protections were an important talking point, and 29% said community services.

How companies treat their employees was also a top issue for 45% of respondents.

According to one US consumer involved in the survey: “It is the company you are financially supporting when you buy its product. We have too many choices to buy a product from a company we don’t like.”

When it comes to which sources of information most influence consumers’ brand perception, word of mouth was the leading influence, with 88% giving this as a major opinion driver. Online reviews were important for 83% of respondents, while 81% said online search results were influential. Traditional media, such as news sources, awards and advertising, tended to be more influential for Brazilians than for other nationalities involved in the survey.

The report, The Company Behind the Brand: In Reputation We Trust, is available online here.